August 19, 2009

A five-person arbitration panel awarded Ethiopia and Eritrea damages yesterday, ending eight years of litigation between the two countries. The countries had filed claims against one another for a variety of business, property and human rights violations in the wake of their two-year war about a decade ago.

The award means that Ethiopia will receive about $10.5 million from Ertrea. But the payment is part of a much larger arbitration award.

The panel, which was established by the Permanent Court of Arbitration, based in the Hague, issued an extensive award on Aug. 17 against both sides for a variety of war-related damages.

A history of the arbitration panel’s work, the background, and the text of the final awards, is available at the Permanent Court’s site here.

The panel awarded Ethiopia about $174 million in damages. At the same time, Eritrea was awarded about $163.5 million for death, injury, rape, looting, and destruction resulting from the two-year war between the countries.

The war between Eritrea and Ethiopia began in 1998, when Eritrea tried to remove Ethiopian troops from Badme, a contested border town.

In 2002, the arbitration panel fixed a boundary between Ethiopia and Eritrea, and giving the town of Badme to Eritrea.

Both sides accepted the arbitration award, according to the Associated Press, with Eritrea citing the “final and binding nature” of a 2000 peace agreement that led to the boundary ruling and this week's award.

Ethiopia originally claimed $14 billion in damages, three times Eritrea’s 2005 gross national product.. Eritrea claimed $6 billion in damages. The AP reports that both claims exceeded the capacity of the other nation to pay.